India will allow mergers between telecommunications carriers with up to 50 percent combined market share, easing rules to spur deals in the crowded telecommunications sector.

The government, however, retained a plan to levy a fee on carriers if the merger involved low-priced government allocated airwaves, making deals costlier, in long-awaited mergers and acquisition guidelines released on Thursday.

Currently companies are allowed to merge if their combined market share does not exceed 40 percent in any of the country's 22 telecommunications service areas. The market share includes their share of the customers as well as the revenue generated in a service area.

Government officials have previously shared the broad contours of the new mergers and acquisition rules.